Economic Growth and Changes in Well-Being

A new paper by Elissaios Papyrakis and Jacopo Baggio (Arizona State University), published online in Social Indicators Research, makes use of agent-based modelling to explore how different types of economic growth (pro-poor, pro-middle, pro-rich, neutral), in combination with sensitivity to social comparison and past income, can be a key determinant of happiness trajectories and future welfare levels. Pro-middle (and balanced) growth corresponds to much higher levels of long-term happiness in comparison to pro-rich growth. The paper links to the recent empirical research pointing to a weak correlation between economic growth and subjective well-being (happiness) (i.e. the so-called ‘Easterlin paradox’).